Deferred Compensation Program
The Wisconsin Deferred Compensation Program, or WDC, is a supplemental
retirement savings program available to all active state and university
employees. Active local government and school district employees may
also be eligible if their employers elect to offer this optional benefit
What is the WDC?
The WDC is an Internal Revenue Code Section 457 deferred compensation
plan. Highlights and features of the WDC can be found here.
With a WDC account, you can invest pre-tax or Roth (post-tax) dollars
in a variety of investment options.
- Pre Tax: If you choose the pre-tax option,
these deferrals reduce your taxable income, which in turn, lowers
your current state and federal income taxes. Also, any interest/gains
you earn are tax free (until you withdraw the funds). The dollars
you save in the WDC pre tax only become taxable when you receive
a distribution. This is normally upon separation from service
or retirement, when you may be in a lower income tax bracket.
- Roth (Post Tax): If you choose the Roth (post-tax)
option, your deferrals are taxable in the year you make them.
They are not taxed when distributed. Earnings are also not taxed,
provided that your age is at least 59 1/2 and you have held your
Roth account for at least five years. Click here to learn more
about the Roth
The WDC is not intended for use as a savings account; it is a retirement
savings account. You may only withdraw dollars from your WDC account
at separation from service, retirement, death or by demonstrating
a severe financial hardship as defined by federal tax laws.
With the WDC, you design a savings plan that is right for you.
The wide variety of investment options available to you include:
- Target Date Retirement Funds. These funds are designed for
the investor who may not have the time—or the desire—to
closely monitor and manage his or her account. The target date funds
are designed to adjust your exposure to risk over time, as your
risk tolerance changes. For example, as you near retirement, your
assets invested in these funds will be shifted to a more conservative
allocation because you’ll have less time to make up for
any market downturns or losses that you could incur. To get started,
all you have to do is choose the fund that most closely matches
the year in which you expect to retire.
- Passive Index Funds. Some participants prefer
to invest in certain asset classes rather than specific funds.
The WDC offers six different passive index funds that are designed
to closely mirror the performance of a particular market index.
- Actively Managed Funds. These funds include
11 actively managed investments that range from conservative to
aggressive. There is a range of conservative choices, including
an FDIC bank option, stable value fund and money market option,
along with eight other bond and stock funds that range from moderate
- Self-Directed Brokerage Account. This option
provides a choice of more than 3,000 additional mutual funds and
is offered through the Charles Schwab Personal Choice Retirement
Account®. Note: The WDC PCRA option does not provide the ability
to purchase stocks, commodities or exchange-traded funds. It is
limited to mutual funds only.
- Managed Account Options. The WDC also offers
an optional suite of investment advisory services. The services include Online Investment
Guidance, Online Investment Advice and a Managed Account option.
These services may not be for everyone, but they can provide investment
help for those who choose to take advantage of them. There is
an additional cost to participants who opt to use online investment
advice or the managed account service.
How much may I contribute to my WDC account?
The maximum deferral you can make to the WDC in 2018 is 100% of
your includible compensation (taxable income), not to exceed the
annual Internal Revenue Service legal limit of $18,500. Individuals
who are age 50 or older during the 2018 calendar year may use the
"Age 50" Catch-Up provision to contribute an additional
$6,000, for a maximum of $24,500. If you are within three years
of your normal retirement age, you may use the Special Catch-Up
provision, which allows you to save an additional $18,500 in 2018.
This amounts to a total possible contribution of $37,000. Note:
If you are eligible for the catch-up options, you may contribute
to one option or the other. You may not contribute to both catch-up
options in the same year. Visit the IRS website for more information on 2018 retirement plan contribution limits.
What about fees?
effective January 1, 2017
If Participant Balance is Between:
Fee Per Month / is:
Fee Per Year / is:
$0 to $5,000
$5,001 to $25,000
$25,001 to $50,000
$50,001 to $100,000
$100,001 to $150,000
$150,001 to $250,000
A copy of the WDC Plan and
Trust document is included here. This document governs the WDC
plan procedures and policies. In addition, the Deferred
Compensation Board has a written Investment Policy Statement,
which can be accessed here.
For additional general information on the WDC, see Frequently
Asked Questions, the WDC
Fact Sheet, the WDC Internet
site, or contact the plan administrator at:
Wisconsin Deferred Compensation Program
5325 Wall Street, Suite 2755
Madison, WI 53718-7982
Telephone: toll-free 1-877-457-9327